The world is changing very quickly due to blockchain, bitcoin and cryptocurrency initiatives, many of which are global in nature. However, one major battle for the future in terms of payment transmission is really heating up on a massive scale with Facebook’s Libra project and now, Binance’s Venus.
What’s fascinating is that a paradigm shift is coming about, where crypto-native firms that are nimble, flexible and not necessarily subject to U.S. guidelines will force the issue of regulation vs acceptance much quicker than many lawmakers and regulatory authorities can even analyze the information.
For anyone that doesn’t already know, Libra is Facebook’s entry into the world of digital currencies, where the company wants to allow its approximately 2.5 billion users around the world to either send money to other FB users or even use it to buy online goods at participating entities. Libra’s stablecoin will be pegged to a basket of global currencies to reduce foreign exchange volatility and be less reliant on the U.S. dollar, while also making it more attractive to non-U.S. users. It will also have a digital wallet from Calibra, FB’s new financial services subsidiary.
The bottom line? Facebook wants Libra to become the next, global evolution of PayPal.
However, as just about everybody knows, Facebook hasn’t done a good job protecting people’s privacy and the U.S. government, while having legitimate concerns about Libra itself, is using FB’s black eye from privacy as a convenient reason to stall the project.
Who is stepping up now? Binance, the crypto exchange that is arguably the single most influential player to individual investors on a global scale in digital currencies. Sensing the opportunity, Binance’s ambitious Venus project wants to create multiple stablecoins, many of which will be pegged to the local fiat currency of a particular country. While this is admittedly different from Libra’s single stablecoin, Venus is also looking to expand crypto adoption by partnering with businesses, organizations and even governments that want to expand into the digital world.
How the final version of Venus looks is anybody’s guess, but it’s no secret that Binance will be evaluating it as a means of payment and as a medium of exchange. Not only that, but it would be silly to think that it won’t be tied in some way to BNB, Binance’s own digital currency, in another effort to boost BNB’s value. But what’s more important is that Binance’s developers are heads-down until this project comes into being, without any fear that the U.S. government can do anything about it or limit its availability in certain places like it’s trying to do with Libra (China, India, etc).
Venus will progress virtually unchecked while Libra has its battle with the U.S. government. What our politicians don’t yet realize is that digital currencies as part of the new global economy are like the proverbial dike with holes of leaking water: put your thumb in to stop one and another leak will take its place in a different location.
The U.S. needs to get its act together quickly or risk losing innovation in this crucial space to the rest of the world.